Research Summary
The report discusses the recent positive streak in US spot Bitcoin ETFs, which has contributed to Bitcoin’s recovery from a previous drop. It suggests a Bull Call Spread strategy for traders, expecting the Bitcoin price to increase. The report also provides a step-by-step guide on how to execute this strategy on Deribit.
Key Takeaways
Bitcoin’s Recovery and ETF Inflows
- Positive Streak in Bitcoin ETFs: US spot Bitcoin ETFs have reported net inflows of $147.4 million, marking a four-day streak of gains. This has aided Bitcoin’s recovery from last week’s drop.
- Impact of ETF Inflows: The inflows into Bitcoin ETFs have significantly contributed to Bitcoin’s recovery, indicating a strong correlation between ETF inflows and Bitcoin’s price.
Bull Call Spread Strategy
- Strategy Proposal: Given the positive outlook on Bitcoin, the report suggests a Bull Call Spread strategy. This involves buying a Call option at a lower strike price and selling a Call option at a higher strike price.
- Profit and Loss Potential: The maximum profit from this strategy is $765 per Bitcoin, while the potential loss is limited to the initial debit of $235.
Bitcoin’s Technical Analysis
- Short-term Low Formation: Technical analysis indicates that Bitcoin has formed a short-term low, suggesting that the uptrend is likely to continue, albeit at a slower pace.
- Resistance Levels: The recovery is evident as short-term resistance levels are being breached without notable retracements, indicating a potential establishment of a short-term low in Bitcoin.
Trade Execution on Deribit
- Trade Implementation: The report provides a step-by-step guide on how to execute the Bull Call Spread strategy on Deribit, a popular cryptocurrency derivatives trading platform.
Actionable Insights
- Consider Bull Call Spread Strategy: Given the positive outlook on Bitcoin, traders might consider implementing a Bull Call Spread strategy. This involves buying a Call option at a lower strike price and selling a Call option at a higher strike price.
- Monitor ETF Inflows: Traders should keep an eye on the inflows into Bitcoin ETFs, as they have shown a strong correlation with Bitcoin’s price. A continued positive streak in ETF inflows could further support Bitcoin’s recovery.
- Watch Resistance Levels: Traders should monitor Bitcoin’s resistance levels. Breaching these levels without notable retracements could indicate a potential establishment of a short-term low, suggesting a continued uptrend.
